Capital mkt reforms to pick up pace

Continued efforts will be made to further improve the quality and expand the size of the Chinese capital market during the 15th Five-Year Plan (2026-30) period, which is conducive to the development of new quality productive forces, said Wu Qing, chairman of the China Securities Regulatory Commission.

Wu made the remarks at a news conference on Friday, on the sidelines of the fourth session of the 14th National People's Congress.

Equity financing will be more diversified, exploring multiple exit channels for private equity and venture capital firms. The bond, real estate infrastructure trust and asset securitization markets will further mature in order to better serve new quality productive forces with more products and tools, he added.

A new set of listing standards will be introduced at the Nasdaq-style ChiNext in Shenzhen to provide stronger support for companies in new industries, using new business formats and adopting new technologies, while also enabling innovative enterprises in areas such as new consumption and modern services to access capital markets.

Effective reform measures already implemented at the STAR Market in Shanghai will be replicated at ChiN-ext, including a prereview mechanism for initial public offering applications and allowing companies under IPO review to raise capital from existing shareholders, said Wu.

The overall reform plan for ChiN-ext has largely taken shape and will be released at an appropriate time after further refinement, he said.

The A-share market refinancing measures will be optimized to better support quality companies and facilitate technology advancement. The standards already used at ChiN-ext and STAR Market for asset-light companies with high R&D investment will be promoted to the main board, according to Wu.

Regulation of new types of businesses has also been underlined. Supervision over high-frequency quantitative trading will be deepened and refined. The CSRC will also unveil regulations for derivatives trading, said Wu.

To further improve market resilience, efforts will be made to better facilitate long-term investment, the inflow of long-term capital and the optimization of a market stabilization mechanism with Chinese characteristics, and the enrichment of countercyclical means and mechanisms, according to Wu.

While international investors have expressed greater demand for diversified asset allocation, the appeal of Chinese assets has risen significantly. Against that backdrop, China will further facilitate cross-border investment and financing, and advance the two-way opening-up for products and service providers, he said.

During the 14th Five-Year Plan (2021-25) period, the Chinese capital market made much progress in terms of size, structure and quality, seeing its resilience and risk resistance significantly strengthened. The stock market, which serves as an important economic indicator, has played a key role in stabilizing employment, companies' operations and market expectations.

Over the past five years, the total value of equity and bond financing in major Chinese exchanges reached 64 trillion yuan ($9.3 trillion), among which 5.9 trillion yuan was contributed by equity financing. The proportion of direct financing increased to 31.97 percent, up 3.2 percentage points from the previous five-year period. This indicates the profound structural changes and the enriched investment and wealth management tools provided to investors, said Wu.

At present, the total market value of the A-share market exceeds 110 trillion yuan. The combined annual revenue of 5,400-plus A-share companies equals over half of the country's GDP.

Moreover, enterprises in strategic emerging industries account for 45 percent of the constituent stocks of the benchmark CSI 300 Index. The circulating market value of A shares held by medium and long-term funds, including mutual funds, social security, annuities, and insurance, has increased by more than 50 percent, he added.